For the fiscal year 2022, Star Entertainment Group posted a net deficit of A$178.1 million (£103.9 million/€122.4 million/$122.9 million), even though there was a significant recovery after the pandemic.
Although the group’s income remained relatively stable compared to the previous year, the net loss was caused by persistent difficulties arising from property closures and operational limitations due to the COVID-19 pandemic, which had enabled the group to achieve a net profit of A$57.9 million last year.
The lifting of many COVID-19 restrictions in the latter half of the year helped Star Entertainment Group’s domestic Australian revenue to recover. However, increased expenditures, particularly a non-recurring goodwill impairment charge of A$162.5 million, resulted in a net loss.
This impairment charge was related to the Star Sydney property and included a number of different factors, including the future regulatory outlook for the venue, as well as ongoing assessments.
Star Entertainment Group noted that the value of the business could be further affected depending on the outcome of the assessments.
Furthermore, Ben Heap, the temporary chairman appointed in May, stated that regulatory assessments also impacted Star Entertainment Group’s performance in the 2022 financial year.
The Star Entertainment Group’s operational assessment will be finalized by the conclusion of August. Concurrently, an independent evaluation of The Star’s gambling permit in Queensland was also declared in June.
“The disturbances stemming from the COVID-19 pandemic and the regulatory examinations have presented substantial obstacles. I am appreciative of the commitment of our 8,000 team members and express my gratitude for their diligent efforts,” stated Matt Bekier, the departing chief executive officer.
“The fundamental strength of the enterprise has empowered us to recover robustly following COVID-19 related property closures and operational limitations.”
Bekier also emphasized the effectiveness of The Star’s “rejuvenation strategy,” which is intended to reestablish stakeholder confidence, and the incorporation of new senior executives to propel the business forward.
Robbie Cooke was designated Managing Director and chief executive officer in July, the fourth individual to occupy the position since late March. He will succeed Jeff Hogg, who served as temporary chief executive officer in June.
“Robbie is ideally positioned to guide The Star and restore faith in the organization. He brings a wealth of expertise and experience to the position and will steer the company through its critical revitalization plan, which has already commenced and will implement a variety of short and medium-term initiatives, with an emphasis on governance, culture, training, and risk and compliance systems and technology, particularly in relation to anti-money laundering/counter-terrorism financing and know your customer responsibilities,” said Bekier.
Starlights financial performance for the year ending June 30th showed earnings of $1.53 billion, a slight dip of 1.2% from the $1.54 billion recorded in 2011. Total revenue, which includes gambling revenue after accounting for player rewards and promotional offers, also reached $1.53 billion.
The Sydney Starlight Hotel, a key contributor to the company’s revenue, generated $781 million despite being closed for 102 days due to pandemic restrictions. The Gold Coast Starlight Hotel brought in $424 million, while the Brisbane Starlight Hotel contributed $326 million to the total revenue.
Examining the costs, expenses rose across the board, with the most significant increase stemming from depreciation, amortization, and impairment, driven by a one-time goodwill impairment charge of $162.5 million. Employee expenses constituted the largest cost, reaching $597.1 million, while government taxes and levies totaled $387.7 million.
As a result, earnings before interest and taxes (EBIT) reached $147.7 million, compared to $138.4 million in the previous year. After factoring in net financial costs of $42.3 million, the pre-tax loss amounted to $200 million, a stark contrast to the profit of $79.8 million in 2021.
Starlight benefited from a tax credit of $1.4 million and recorded a $20.5 million fair value adjustment on cash flow hedges, resulting in a net loss after tax of $178.1 million, compared to a profit of $51.65 million in the previous year.
Furthermore, earnings before interest, taxes, depreciation, and amortization (EBITDA) experienced a significant decline of 45.0% year-over-year, reaching $237 million.
The previous twelve months have demonstrated the resilience of our company and the swiftness with which patrons have returned, enabling hotels to function without restrictions, stated interim CEO Hogg. This inspires optimism about the future.
The Star Group’s ventures in Australia remain highly lucrative. They possess significant long-term permits in prime locations, and our hotels are evolving into top-tier resorts.
We express gratitude for the exceptional support provided by all our visitors and dedicated staff members during these challenging periods.
